What does a Financial Institution need to consider when looking for a technical partner?

In today’s world of collaboration between the Financial Institutions and Fintech there could be a number of reasons for looking to partner with a technical provider rather than attempt to create a new product internally. A subject previously discussed.

Whether looking to modernise incumbent infrastructure, maybe launching additional new products without impacting current infrastructure or integrating Third Party Services to either create efficiencies in workflows or enhance value for customers.

There are many vendors out there, how do you choose the right one for you?

Let’s start by looking at what will influence that decision.

What budget is available?

What are the timescales for implementation?

What internal resources and skills are available to manage the project?

Is this a clearly defined requirement for a specific product or will there be a need for a degree of flexibility to expand the scope and scale of the project over time?

What integrations to Third Party Service providers will be needed?

The answers to these questions will determine the type of Vendor and platform best suited to provide the required solution.

The options are,

 Opt for a minimal, maybe White Label Solution.

This will provide the minimum functionality to get an MVP operational.

You will be able to start onboarding clients, processing transactions and generating revenues. All very important for a new start up.

Select an out of the box solution

An all encompassing solution with all the third party applications included.

This will be a one size fits all with little or no choice as to the ancillary services included. It will lack flexibility, both in the initial set up and configuration and will limit any future growth, either by adding additional functionality or products or expanding into new territories.

It may also not be an exact fit for your requirements and may need adjustments to your product to fit.

This may be seen as a quick & easy short-term fix, especially if internal resources do not include the knowledge and skills to define and scope out the required solution.

Choose A Modular Platform

With Modular platforms, while it is possible to just utilise the modules you require initially and introduce more as the business develops, these modules tend to be built on a single platform and technology to enable all the modules to interact and therefore need to be maintained and upgraded together to ensure they still interact.

All the above solutions may appear to offer a quick and cost effective way to market but may be creating long term problems for the growth of the business due to,

• A lack of flexibility in configuration.
• Limited options for Third Party Services due to dependence on built on solutions.
• Limited functionality to cope with additional products, expanding the business geographically and satisfying different regulating bodies or changes in demands from customers?

As a new start up are you starting off your business by heading down a dead end that will only take you so far, or for an existing business embarking on a technical innovation programme that could be just swapping one incumbent system for another soon to be outdated and inflexible system?

A Core platform to create a financial eco-system

The use of microservices, API technology and Cloud platforms enables the use of a Core Platform to build out a complete eco-system incorporating individual components to be developed, updated, managed or integrated separately and operated independently of each other.

Able to support different account types including multi-currency and crypto currencies, cards  and maybe even commodities.

If needed Third Party Vendors can easily be integrated.

As a financial Institution you will need to pick and choose which Third Party Vendor Services you need for any given product and maybe over time add, remove or swap out existing ones for new ones.

Your requirements will always be changing as new products and services are introduced and demands from the market change.

To stay ahead of your competition you need to be agile in the marketplace, have the flexibility to adapt & not be locked into long term contracts limiting your ability to develop and expand the business.

To future proof your business your chosen solution needs to be secure, reliable, configurable, flexible, operate in real time, user-friendly and scalable.

But just as important as the technology platform itself is the development team behind the software. Do they have the experience of designing and implementing varied projects on behalf of their clients?

The quick and seemingly easiest solution for the short term is not necessarily the best decision for the long term benefit of the business.